DIRECTORS' REPORT REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS FOR THE YEAR ENDED MARCH 31, 2016. Dear Members, Your Directors are pleased to présent the 30th Annual Report and the Audited Statement of Accounts for the financial year ended March 31, 2016. During the financial year 2015-2016, your Company has recorded a gross turnover of Rs. 200,376 lacs up from Rs. 191,271 lacs of the previous financial year. Profit before Tax was up by 153% from Rs. 6,051 lacs to Rs. 15,329 lacs due to softening of the raw material prices alongwith the improved operational efficiences. Consequently the earnings per share also went up from Rs. 28 to Rs. 70. The plastic business has achieved a volume growth of 3% and value growth of 5%. The performance of the Company's retail business operated under the brand name '@home' had witnessed an upturn, achieving turnover of Rs. 23,805 lacs, which was up by 9% vis-à-vis Rs. 21,750 lacs of the previous financial year. The Company's 16 @home stores are spread PAN India in 12 cities. RESERVES Your Directors proposes to carry a sum of Rs. 5,000 lacs to the General Reserve Account out of the profits available. DIVIDEND During the year under review, your Company had declared interim dividend twice, the first interim dividend of Rs. 2.50 i.e. 25% on November 5, 2015 and the second interim dividend of Rs. 4.50 i.e. 45% on March 14, 2016, thus aggregating to Rs. 7.00 i.e. 70% for the financial year 201 5-2016. Considering the aforesaid interim dividends, the Company has not recommended any final dividend for the financial year 201 5-2016 on the equity shares of the Company. The total outflow on account of the interim dividends (including distribution tax, surcharge and education cess) amounts to Rs. 1,141 lacs for the financial year 201 5-2016. AWARDS AND RECOGNITIONS Your Company constantly strives towards reducing carbon foot prints, energy conservation and preserving the environment by adopting right practices for saving the scarce resources. In recognition of the same, all the Company's units have been awarded the ISO 50001:2011 EnMS Certifications form TUV-SUD Germany. Further, with its drive to obtain Quality Management and Energy Efficiency, your Company has achieved the First prize under the National Award for Energy Conservation from BEE-Government of India for its Hosur Unit. Furthermore, the Company has also received Sustainability 4.0 Believer's certificate from "Frost and Sullivans" for its Vasona Plant, which certifies that the Company's business is sustainable. The Company also believes in giving value products to its customers and places customer satisfaction at the apex. In furtherance and recognition of this principle, the Company has been awarded the "BIFMA Compliance certification" by the UK Certification and Inspection Limited for its Home, Office, Educational and Modular Furniture range. This certification assures well established QMS practices and well documented test and procedures. LISTING AGREEMENTS Your Company has executed fresh Listing Agreements with BSE Limited and National Stock Exchange of India Limited, in compliance with Regulation 109 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). CORPORATE SOCIAL RESPONSIBILITY (CSR) In terms of the provisions of Section 135 of the Companies Act, 2013 read with the CSR Rules, the Board of Directors of your Company has adopted a CSR Policy and the same is available on its website and can be accessed at <http://> www.nilkamal.com/Images/fckUploadedfiles/file/CSR%20POLICY.pdf Further, in accordance with the Company's CSR Policy, the Board of Directors of your Company has contributed and utilized Rs. 199.07 lacs towards Corporate Social Responsibility activities. The Company has expended the said sum, amongst other activities, towards promoting education, providing health care and sanitation facilities and environmental sustainability. The Annual Report on CSR activities is annexed herewith as "Annexure A". Further, the Company is also in the process of incorporating a Company under Section 8 of the Companies Act, 2013 namely 'Nilkamal Foundation'. Your Company shall, in addition to making direct expenditure towards CSR activities, shall also contribute to Nilkamal Foundation for carrying out the said activities. MATERIAL CHANGES AND COMMITMENTS In terms of Section 134(3)(l) of the Companies Act, 2013, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report. BUSINESS RESPONSIBILITY REPORT Your Company has prepared the Business Responsibility Report (BRR) that describes the initiatives undertaken in line with the key principles enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business' framed by the Ministry of Corporate Affairs. As a Green Initiative, the said BRR has been hosted on your Company's website www.nilkamal.com CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT A separate section on corporate governance practices followed by the Company, together with a certificate from the auditors confirming its compliance, forms a part of this Annual Report, as per SEBI Regulations. Further, as per Regulation 34 read with Schedule V of the Listing Regulations, a Management Discussion and Analysis report is annexed to this report. SUBSIDIARIES AND JOINT VENTURES As on date, your Company has two direct subsidiaries: Nilkamal Eswaran Plastics Private Limited at Sri Lanka; Nilkamal Crates and Bins - FZE at UAE and one step-down subsidiary: Nilkamal Eswaran Marketing Private Limited at Sri Lanka; and two Joint Venture Companies: Nilkamal Bito Storage Systems Private Limited, which is the Indo-German Joint Venture and Cambro Nilkamal Private Limited, which is the Indo-US Joint Venture. There has been no material change in the nature of business of the said Companies and the said Companies have shown contined profitability during the financial year 2015-16. In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1, which forms part of the Annual Report. In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.nilkamal.com Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.nilkamal.com PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Your Company has not given any Loans or Guarantees nor has it made any Investments covered under the provisions of Section 186 of the Companies Act, 2013. NOMINATION AND REMUNERATION POLICY OF THE COMPANY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy relating to remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees, alongwith the criteria for appointment and removal of the Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The Nomination and Remuneration Committee is fully empowered to determine /approve and revise, subject to necessary approvals, the remuneration of managerial personnel, after taking into account the financial position of the Company, trends in the industry, qualifications, experience, past performance and past remuneration, etc. The details of the remuneration policy are available on the website of the Company www.nilkamal.com.The Non-Executive Directors are paid sitting fees for every meeting of the Board and its Committees attended by them. AUDITORS AND AUDITORS' REPORT Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. B S R & Co. LLP, having ICAI Registration No. 101248W/ W-100022 and M/s. Vora & Associates having ICAI Registration No. 111612W were appointed as the Company's Joint Statutory Auditors at the 28th Annual General Meeting to hold office for a period of four years and three years respectively, subject to the ratification by the shareholders at every subsequent Annual General Meeting. Both, M/s. B S R & Co. LLP and M/s. Vora & Associates, being eligible have expressed their willingness to such re-appointment as the Joint Statutory Auditors. A certificate from them has been received to the effect that their appointment as Statutory Auditors if made would be in accordance to the provisions of Sections 139 and 141 of the Companies Act, 2013 and rules framed there under. A resolution seeking ratification of their appointment forms a part of the Notice convening the 30th Annual General Meeting and the same is recommended for your consideration and approval. The notes to accounts referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further comments. COST AUDITOR In conformity with the provisions of Section 148 of the Companies Act, 2013 and Companies (Cost Records and Audit) Rules, 2014, the Company has appointed M/s. B. F. Modi and Associates, Cost Accountants, as the Cost Auditors to carry out audit of the cost records of the Company for the financial year 2016-2017. Mr. B. F. Modi being eligible has expressed his willingness to be reappointed as Cost Auditors of the Company for the financial year 2016-2017. The Cost Audit Report for the financial year ended March 31, 2015 was filed in due time with the Central Government (Ministry of Corporate Affairs). SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed Mr. Pratik M. Shah, Practising Company Secretary to undertake the Secretarial Audit for the financial year 2015-2016. The Report of the Secretarial Auditor is annexed herewith as "Annexure B". EXTRACT OF ANNUAL RETURN As required pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in Form MGT 9 is annexed herewith as "Annexure C". DIRECTORS The Board of your Company is duly constituted in accordance with the requirements of the Companies Act, 2013 read with the Listing Regulations. In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr. Hiten V. Parekh (DIN: 00037550), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-election. During the year under review, with a view of overseeing the succession planning of the top management personnel, your Company had re-designated its Executive Directors. The resolutions for their respective re-designations forms a part of the Notice convening the 30th Annual General Meeting and the same is recommended for your consideration and approval. Further, all Independent Directors have given declarations that they meet the criteria of independence as given under Section 149 of the Companies Act, 2013 and the relevant provisions of the Listing Regulations. The required information of the Directors to be re-appointed, pursuant to the provisions of the Listing Regulations, forms part of the Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same; (b) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the annual financial statements have been prepared on a going concern basis; (e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; (f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company for the financial year 2015-2016 are prepared in compliance with the applicable provisions of the Act, Accounting Standards and as prescribed by Listing Regulations. The said Financial Statements have been prepared on the basis of the audited financial statements of the Company, its subsidiaries and joint venture companies as approved by their respective Boards of Directors. ADEQUACY OF RISK MANAGEMENT SYSTEMS The Board of Directors have adopted an Enterprise Risk Management Policy framed by the Company, which identifies the risk and lays down the risk minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism named Whistle Blower Policy (WBP) to deal with instance of fraud and mismanagement, if any.The details of the WBP is explained in the Corporate Governance Report and also posted on the website of the Company. REPORTING OF FRAUDS There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 An Internal Complaints Committee has been constituted by the Company in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder to redress complaints received on sexual harassment. During the financial year under review, the Company has not received any complaints of sexual harassment. RELATED PARTY TRANSACTIONS The Board of Directors has adopted a Policy on materiality of and dealing with related party transactions. All contracts or arrangements with related parties, entered into or modified during the financial year were at arm's length basis and in the ordinary course of the Company's business. All such contracts or arrangements were entered into only with prior approval of the Audit Committee, except transactions which qualified under Omnibus approval as permitted under law. No material contract or arrangements with related parties were entered into during the year under review. Your Company's Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Company's website at <http://www.nilkamal.com/Images/fck> Uploadedfiles/file/Related Party_Transactions_Policy.pdf. PERFORMANCE EVALUATION The Board of Directors has carried out an annual evaluation of its own performance, its Committees and individual Directors pursuant to the requirements of the Act and the Listing Regulations. Further, the Independent Directors, at their exclusive meeting held during the year reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board with the Company. STATUTORY INFORMATION The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure D". In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure forming part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report. Having regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee. Your Company has not accepted Deposits from public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company's operations in future. ACKNOWLEDGEMENTS Your Directors wish to place on record their sincere appreciation for the encouragement and co-operation received by the Company from the Bankers, State Government Authorities, Local Authorities and its Employees during the year. For and on behalf of the Board Vamanrai V. Parekh Chairman Place: Mumbai Date: May 14, 2016 |